Macquarie looks for more power assets in Europe

FRANKFURT Mon Jan 27, 2014 10:52am EST

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FRANKFURT Jan 27 (Reuters) - Australian bank Macquarie is looking to expand its portfolio of power assets, one of its executives said, and may even invest in continental Europe, where utilities are closing thousands of megawatts worth of gas and coal plants.

Long established as a buyer of European infrastructure assets, including gas networks offering fixed annual returns, Macquarie has also started to buy power plants, which European utilities are shedding as a result of high gas prices and low power contracts.

German utilities E.ON and RWE alone are mothballing or closing more than 15,000 MW of plant capacity, also hurt by surplus renewable generation that is pushing gas plants out of the market.

Trading houses and investment funds from Europe and Asia have shown interest in snapping up power assets in Europe at reduced prices from utilities, which are selling them off to reduce their mounting debts.

Last year, Macquarie led an investor group to purchase the 832 megawatt (MW) Severn gas-fired power station in Britain from Danish utility DONG Energy for 305 million pounds ($503.33 million). A year earlier, it had agreed to buy French electric utility EDF's 819 MW Sutton Bridge gas power station in England.

"Macquarie has acquired several conventional power plants in Britain. But we're also considering investing in generation outside the UK," Hilko Schomerus, managing director at Macquarie Infrastructure and Real Assets, told Reuters.

"Therefore, we're looking for opportunities in the whole of Europe, including Germany, even though the situation there is more challenging."

Other investors, too, have zeroed in on power plants as an investment, most notably Japanese trading house Marubeni Corporation, which last year agreed to acquire 50 percent of a 3,300 MW portfolio of thermal and renewable power generation assets in Portugal from France's GDF Suez.

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